Qantas sees little growth in Japanese tourists

Date: November 27 2012

Matt O'Sullivan

Qantas has warned that growth in Japanese tourists will remain "stagnant at worst, anaemic at best" because their travel tastes are changing and there is a lack of investment in tourism attractions to woo them to Australia.

The airline has highlighted the challenges of reversing a decade-long fall in Japanese tourists as part of a pitch to aviation authorities to allow its budget-offshoot, Jetstar, to continue a code-sharing alliance with Japan Airlines until 2017.

In an application to the International Air Services Commission, Qantas has blamed the fall in Japanese tourists on a "significant lack" of investment in critical tourism infrastructure in Australia, as well as the growing tendency among Japanese to visit destinations closer to home and high-end holiday hotspots.

The federal government's Tourism Forecasting Committee reports the number of tourists from Japan has fallen at an average rate of 6 per cent a year over the past decade. Over the next decade, the committee is forecasts average growth of just 1.6 per cent a year.

Qantas said the advent of budget airlines in Asia meant Australia was competing with a "growing number of more accessible destinations".

Japan has opened up its aviation market to foreign interests, which has allowed three new airlines, including the Qantas joint venture Jetstar Japan, to fly on domestic and regional routes.

Qantas said the Australia-Japan route had also been affected natural disasters and the global financial crisis but pointed out that these were "short-term in nature and serve only to exacerbate and highlight the changing underlying characteristics of the route".

"The weakness of this route is of considerable concern. Over the past decade, the number of Japanese visitors travelling to Australia has almost halved," the Qantas executive manager of government relations, Tony Wheelens, said in the application to the IASC.

"The rise of regional low-cost carriers, significant lack of investment in critical tourism infrastructure in Australia and changes in Japanese consumer travel trends towards more regional international destinations and high-end international destinations have served to irrevocably change the Australia-Japan route."

Qantas stopped direct flights between Perth and Tokyo in May last year because of high fuel prices and competition from airlines including Singapore Airlines and Cathay Pacific. It also replaced Boeing 747 jumbos with smaller Airbus A330 planes on the Sydney-Tokyo route.

A year earlier, JAL ditched flights between Tokyo and Brisbane.

"Reflecting the difficult operating environment, load factors on the Australia-Japan route have remained stagnant and well within reasonable levels to cater for demand," Mr Wheelens said.

Qantas said the number of business travellers on the route had remained stagnant over the past three years.